LookSmart inches closer to profitability

Internet powerhouse LookSmart is on track to beat its expected operating profitability by Q4, 2001, announcing today first quarter 2000 revenues of $21. 5 million, up from $6.6 million in Q1 1999.

Strong revenues from licensing its search solutions to portal and media companies as well as selling advertising on syndicated partners' search pages contributed to much of the growth, officials said. New revenue was also added from charging merchants for access to directory listings across LookSmart's distributed network.

In addition to the strong revenues, LookSmart's operating losses were cut by half to $9.5 million during the first quarter, down 51 per cent from $19.3 million in the same period in 1999.

Continued growth is expected for the company, which has made more than 280 partnerships in the US and is expanding internationally.

"With recently announced partnerships with Time Warner, Prodigy and Road Runner due to come on stream, continuing rises in advertising yields and rapid growth in our new directory listings business, we expect accelerated revenue growth for the remainder of the year," chairman and CEO Evan Thornley said.

According to officials, LookSmart's success comes from its "write once, sell many times" business model.

"We continued strong revenue growth at high margins without "buying" growth through increased spending or acquisitions. This acceleration in our performance raises our expectations as to when the company can be profitable," Ned Brody, LookSmart's chief financial officer said.

Brody said LookSmart's Q4, 2001 expectation to reach operating profitability before non-cash items had been pushed forward due to business improvements and strong growth.

"We are now confident to bring that target forward two quarters to Q2 of 2001. As a result, with $134.7 million in cash and short-term investments at the end of the first quarter of 2000, we are comfortable that we have a clear path to profitability and cash positive operations without a requirement to raise additional capital," Brody said.

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